The companies’ regulator and conservator, the Federal Finance Housing Authority, ordered the companies to delist Wednesday morning after Fannie Mae fell below the NYSE’s $1 trading requirement for more than 30 days and received a delisting notice from the exchange. The agency also ordered Freddie Mac to delist, as its price was trading near the $1 mark.

The delistings will be effective around July 8, 10 days after the companies file a notice of delisting with the Securities and Exchange Commission.

The companies will still post filings with the SEC and investors will still be able to buy and trade the stock on the Over-the-Counter Bulletin Board.

By trading Over the Counter, the stocks will lose a lot of liquidity they enjoyed under the NYSE, which has a specialist assigned to each stock on the exchange, explained Bert Ely, a monetary policy consultant with Alexandria-based Ely & Co. The specialist maintains an inventory of stock that they buy or sell to help fill orders, which helps reduce the bid-ask spread and allow for large trades.

After switching to Over-the-Counter, the trading volume will likely drop, prices will deteriorate further, price volatility will increase and it will become more difficult to trade a large number of stocks, he said.

Does the delisting make it less likely that Fannie and Freddie will ever emerge from conservatorship as private companies?

“It probably reduces the odds from one-in-10 million to one-in-11 million,” Ely said. “There’s no way they can earn their way back to health and return to the government the huge investment it has made in them. There’s no future for these companies as private enterprises.”

So far, Fannie and Freddie have gotten some $127 billion from the Treasury Department.

Freddie Mac spokesman Douglas Duvall declined to comment on what impact the delisting would have on the company.

In a securities filing, Fannie Mae said it does not expect the delisting “will affect, in any way, Fannie Mae’s ability to fulfill its mission to provide liquidity and stability to the mortgage market.”